In the previous articles on “rebates” that are paid by graphic arts manufacturers to printers for purchases of equipment and consumable supplies, THE EAGLE has documented business practices ranging from risky to disastrous. The full effect of the rebates and other high-risk credit policies of some manufacturers have yet to be felt. The inevitable consequences will be harsh. In the short term, however, these policies are already being felt day by day. They are exacerbating over-capacity, further commoditizing print, and sustaining weak printing companies to compete against healthy ones.

In this series, we have shed light on printers who are being lured into treating rebates paid to them for making equipment and supply purchases as “income” rather than what they are – deferred discounts. Some printers, like graphic arts dealers before them, are even driving sales based on the need to achieve volume purchase quotas in order to gain their rebate “income.” As it did with the dealers, this sales policy leads inexorably toward futile attempts to “make up with volume” what is lost on each sale.

We revealed that manufacturers have acknowledged that the rebate system has become unmanageable. Some admit that they are unable to determine whether some sales that involve complex and large rebates are being made profitably or not.